Lead Opinion
Affirmed by published opinion. Judge SHEDD wrote the opinion, in which Chief Judge WILLIAMS joined. Judge NIEMEYER wrote an opinion concurring in part and dissenting in part.
OPINION
In 1933, Congress created the Tennessee Valley Authority (“the TVA”) “in the
The TVA moved to dismiss North Carolina’s suit, arguing that it is barred by (1) the discretionary function doctrine, (2) the Supremacy Clause, and (3) the holding of Ferris v. Wilbur,
I
The TVA first argues that this suit is barred by the discretionary function doctrine. The discretionary function doctrine precludes a suit in tort' against the United States, its agencies, or its officers where (1) “the challénged conduct involves an element of judgment or choice,” and (2) “that judgment is of the kind that the discretionary function exception was designed to shield, ie:,- ... the challenged action is based on considerations of public policy.” Suter v. United States,
Congress has waived the sovereign immunity of certain federal entities “by including in the enabling legislation provisions that they may sue and be sued.” Loeffler v. Frank,
Under these principles, the TVA’s “sue- and-be-sued” clause stands as a broad waiver of sovereign immunity which, absent a showing to the contrary, would encompass North Carolina’s claims. The TVA, however, asserts that a discretionary function exception grounded in the constitutional concept of separation of powers renders this lawsuit inconsistent with the constitutional scheme. To support this position, the TVA looks to our holding in McMellon v. United States,
In McMellon, we examined the question of whether a discretionary function exception bars a lawsuit filed against the United States under the Suits in Admiralty Act (“SIAA”). After noting that the SIAA does not contain a statutory exception from suit for discretionary functions, we concluded that such an exception nonetheless exists by virtue of the constitutional doctrine of separation of powers. We based our conclusion on the fact that the Constitution does not allow judicial regulation which might “prevent[ ] the Executive Branch from accomplishing its constitutionally assigned functions.” Id. at 341. We likewise found that under our constitutional system “the Judicial Branch [may] neither be assigned nor allowed tasks that are more properly accomplished by other branches.” Id. We therefore held that the courts may not assume the power to regulate, through the medium of tort liability, the manner in which the Executive Branch exercises the discretion which the Constitution assigns to it. Id. at 343.
We do not believe that the constitutional concerns underlying our decision in McMellon are present here. The TVA “is a corporate entity, separate and distinct from the Federal Government itself.” Pierce v. United States,
Congress’ statements with regard to the TVA lend support to its independence. When creating the TVA in 1933, Congress indicated that it “intend[s] that the corporation shall have much of the essential freedom and elasticity of a private business corporation.” H.R.Rep. No. 73-130 at 19 (1933). Even more telling, Congress exempted the TVA from the FTCA, see 28 U.S.C. § 2680(£), because it intended that legal claims “be exercised against the Tennessee Valley Authority exactly as they could have been exercised against ... private utility companies.” 79 Cong. Rec. 6563-64 (1946) (statement of Sen. Hill).
This degree of independence which the TVA possesses in large part alleviates the constitutional concerns which we recognized in McMellon. A lawsuit against the TVA is not a suit against the United States itself or one of its agencies subject to the direct executive control which is granted to the President by Article II of the Constitution. Rather, a suit against the TVA is against “a governmental agency in[] the commercial world,” Loeffler,
Even were the TVA more tightly linked with the Executive Branch, this case would not conflict with the principles recognized in McMellon. In this case, a judicial decision on the lawfulness of the TVA’s plant emissions does not strip the TVA of its authority to execute its statutory duties. At most, it could require the TVA to take into account and to abide by certain air quality standards when operating its coal-fired power plants. As the district court recognized, “[t]he Executive’s ability to decide the level of pollutants to emit within
Accordingly, we conclude that this suit does not implicate the separation-of-powers concerns which led to our decision in McMellon. We therefore hold that the broad waiver of sovereign immunity effected by the TVA’s “sue-and-be-sued” clause is not restricted by a discretionary function exception in this case.
II
We next turn to the TVA’s contention that the Supremacy Clause bars this lawsuit from proceeding. By virtue of the Supremacy Clause, the “activities of the Federal Government are free from regulation by any state.” Mayo v. United States,
The CAA provides that federal facilities such as the TVA:
[S]hall be subject to, and comply with, all Federal, State, interstate, and local requirements, administrative authority, and process and sanctions respecting the control and abatement of air pollution in the same manner, and to the same extent as any nongovernmental entity.The preceding sentence shall apply (A) to any requirement whether substantive or procedural (including any recordkeep-ing or reporting requirement, any requirement respecting permits and any other requirement whatsoever) ... (C) to the exercise of any Federal, State, or local administrative authority, and (D) to any process and sanction, whether enforced in Federal, State, or local courts, or in any other manner. This subsection shall apply notwithstanding any immunity of such agencies, officers, agents, or employees under any law or rule of law.
42 U.S.C. § 7418(a). The TVA argues that this provision of the CAA.waives only some of the protections of the Supremacy Clause in that it subjects the TVA only to state “requirements” which are based on objective, quantifiable standards subject to uniform application. The TVA therefore contends that a state-law nuisance action, not embodying an objective, quantifiable standard, does not fall within Congress’ waiver of Supremacy Clause protection. In essence, the TVA maintains that a common-law nuisance action is not a “requirement” within the meaning of the CAA.
In assessing the TVA’s argument, we look first to “the literal and plain language of the statute.” Markovski v. Gonzales,
The TVA’s reading of “requirements” likewise finds no support in case law, for the Supreme Court has held that state “requirements” include common-law standards. In Cipollone v. Liggett Group, Inc.,
No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this Chapter.
15 U.S.C. § 1334(b). The question before the Court was whether this statute encompassed state common-law claims. In answering this question, the Court held:
The phrase “[n]o requirement or prohibition” sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common-law rules. [State] regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy.
Cipollone,
Medtronic, Inc. v. Lohr,
In this case, the phrases “all requirements” and “any requirement” sweep at least as broadly as the “no requirement” and “any requirement” language at issue in Cipollone and Medtronic,
In sum, the plain meaning of “requirement” and the Supreme Court’s broad interpretation of the term foreclose the TVA’s argument that the CAA does not
Ill
Finally, we turn to the TVA’s contention that our decision in Ferris v. Wilbur,
This cited language amply demonstrates that Ferris was an early case applying the discretionary function doctrine. Further, because there was no statutory discretionary function exception at issue in Ferris, our ruling necessarily rested on the constitutional concept of separation of powers. See id. (permitting suit to go forward “would be contrary to our theory of government”). As we have already concluded, this concept does not preclude North Carolina’s suit against the TVA. Ferris does nothing to change this conclusion. Ferris was a suit against the Secretary of the Navy, an executive official under the direct authority of the President. As a result, Ferris raised many of the same concerns we recognized in McMellon but which are not present in this case against the TVA, an independent governmental entity. We therefore find Ferris to be inapposite and hold that it presents no bar to North Carolina’s lawsuit.
rv
Based on the foregoing, we conclude that none of the arguments raised by the TVA prevents this suit from proceeding. Accordingly, we affirm the denial of the TVA’s motion to dismiss.
AFFIRMED.
Notes
. Because this appeal raises only legal questions relating to subject-matter jurisdiction, we review de novo the decision of the district court. Welch v. United States,
. The TVA has, in fact, sued the United States on several occasions, successfully arguing
. Although the President appoints the TVA’s Board of Directors (with the advice and consent of the Senate), as with many independent government agencies and corporations, the President’s power of appointment, standing alone, does not subject the agency to direct presidential control. See Morrison v. Olson,
. Some courts have found that the TVA benefits from a discretionary function exception when it engages in governmental functions. See, e.g., Queen v. TVA,
. The fact that North Carolina seeks to hold the TVA liable in tort by seeking injunctive relief rather than damages does not lessen Cipollone's relevance here. Cipollone itself noted that a state requirement can be manifested in damages and "preventive relief.”
. The Medtronic decision was the product of a fractured Court. Nonetheless, a majority consisting of Chief Justice Rehnquist and Justices O’Connor, Scalia, Thomas, and Breyer found that the statute’s reference to “requirement” included state common-law actions. See Duvall v. Bristol-Myers-Squibb Co.,
. We note that Congress used the term "all” in the CAA to express its intent that the CAA's waiver provisions be interpreted broadly. After the Supreme Court interpreted the CAA’s reference to “requirement” to include substantive but not procedural requirements, see Hancock v. Train,
.In both Cipollone and Medtronic, the Court operated under a presumption that favored a narrow reading of the term "requirement.” See Medtronic,
Concurrence Opinion
concurring in part and dissenting in part:
In this case, the State of North Carolina sues the Tennessee Valley Authority (“TVA”) under the North Carolina common law of nuisance to enjoin the way that the TVA operates its coal-fired power plants in other States, namely Tennessee, Alabama, and Kentucky. North Carolina alleges that the lawful emissions from the TVA’s power plants in other States travel downwind and reach North Carolina airspace, where they damage human health and the environment in North Carolina. Even though such emissions are regulated by and in compliance with the federal Clean Air Act and State law at the location of the plants, North Carolina contends that the emissions, whether permitted under applicable statutory laws, nonetheless create a public nuisance under North Carolina common law.
The threshold question presented to us is whether the TVA, a federal agency, is immune from such a suit. Arguing that it is not, North Carolina points to waivers of immunity contained in the TVA Act, 16 U.S.C. § 831e, which provides that the TVA “may sue and be sued in its corporate name,” and in the Clean Air Act, 42 U.S.C. § 7418(a), which provides that every agency of the federal government is subject to and must comply with “all Federal, State, interstate, and local requirements, administrative authority, and process and sane-
The TVA was created in 1933, during the Depression, as a federal agency to implement major national programs and policies. And as the agency created to carry out the important work of the federal government that transcends any individual State’s interests, it is constitutionally protected from State suits initiated by a State disagreeing with congressional programs and policies. In connection with the particular issues raised in this case, the TVA was authorized by Congress to employ available technology for the generation of power, including the very coal-fired generators that North Carolina complains about in this action. For decades, these generators have provided energy to a broad, multistate area of the country and, to be sure, have produced emissions that tend to pollute. But the emissions were a tradeoff inherent in the project created by Congress, and Congress made the governmental choice of providing the benefits given by the TVA at the expense of some clean air, even if clean air was an important policy of any given State. See Dalehite v. United States,
Against this incontrovertible background, I cannot conclude that in authorizing the TVA “to sue and be sued,” Congress intended to traverse separation of powers principles and authorize a State suit against the federal agency questioning the fundamental decisions of the federal government to create the TVA and build coal plants to provide energy and thereby inherently authorize some emissions that are within federal and state regulatory standards. Such a conclusion tends to stand the federal structure on its head,
For these reasons, I conclude that our decisions in McMellon and the other similar cases apply, precluding our finding that a federal statute authorizing the TVA to be sued but remaining silent on whether it could be sued for discretionary functions should amount to a waiver of immunity for making discretionary decisions.
The Clean Air Act, 42 U.S.C. § 7401 et seq., however, presents a different question inasmuch as it is a competing federal governmental policy that directly implicates the emissions from TVA’s coal-fired plants. In that Act, Congress did subject the TVA and other federal agencies to suits in the limited circumstance where the federal agency fails to meet federal or State “requirements ... respecting the control and abatement of air pollution.” See 42 U.S.C. § 7418(a). I agree with the majority that “requirements” cannot be cabined to mean objective, quantifiable State standards, as urged by the TVA. But the waiver is nonetheless limited to violations of State requirements “respecting the control and abatement of air pollution.” Id. (Emphasis added). We do not decide now whether North Carolina common law creates such a requirement, and I agree that we should remand this case to the district court to determine, under North Carolina common law, whether that law has defined a tort imposing a “requirement respecting the control and abatement of air pollution.” If the common law does, then the suit for violation of that law is authorized by the waiver contained in § 7418(a) of the Clean Air Act, even if the emissions are the product of a discretionary function.
Accordingly, I concur in the judgment but dissent from the rationale supporting that judgment to the extent it is inconsistent with what I have stated in this separate opinion.
